Your Toolbox

Happy Employees Will Make Their Bosses Even HappierAs cliché as it sounds, at the end of the day, we all just want to be happy. How we find that happiness is, usually, up to us to decide and measure. And if you're not happy, well, that's when break-ups tend to happen (metaphorically speaking, of course).

Some people find happiness through their work, some find it through sports or healthy competition, and some find it by being a dog dad (*cough* Regan Smith).

Alas, this blog is written for aspiring financial planners in today's world, so I'll focus on the "work lens" for now. After a handful of years navigating this emerging industry, I've had dozens of conversations with young planners across the country and have started to learn what keeps them happy at work and what makes them want to leave to find something new.

Consider this post to be an open letter to anyone interested in growing (or continuing to grow) a team of aspiring planners from the perspective of the people who matter most - your employees.

The Magic Elixir and Why The Problem Exists (note: bold claim in this section)Surprisingly, no matter which young planner I talk to or where they are located, the same topics always emerge whenever we discuss work happiness. To add to that, these recurring themes of satisfaction (or dissatisfaction) are not specifically tied to financial planning at all, but basically any line of work.

If my amateur research and data sampling is accurate at all, it feels like there are a few main ingredients that every organization can sprinkle into their own recipe to keep their employees happy and motivated at work - all without paying for nap rooms, catering free daily lunches, or giving away free company gear (although all those things are very cool).

To jump straight to the punchline, it's all about how you manage your people and their emotions. This premise alone doesn't sound complicated, but I believe that it is the magic elixir that makes or breaks a firm's growth when they might need it most. Framed in another way, if a single advisor does not know how to bring on and manage new employees, their business might not ever scale up or reach its fullest potential. Not to mention, I imagine family vacations out of the country are a lot more stressful when you don't have a team to cover for you while you're out of town for two weeks with no cell service.

In my (semi-unwarranted) opinion, I think the problem is partly derived from our education systems. I went to a highly-rated financial planning program and was given incredible training which led to a great job, but the school’s training ended there. For those who are familiar with Michael Gerber's 'The E-Myth,' I was trained to become a Technician (in financial planning). Similar to the medical profession, students receive training from rigorous programs to be Technicians of the human body - doctors. But while they might be trained to conduct a flawless open heart surgery, they are typically not ready to run the hospital itself or manage teams of other doctors yet.

So there lies a major gap in our industry that I believe we are still coming to terms with - managing and growing strong teams. Once a company is ready to scale up and add new members, they run into the issue of training those people, which requires a certain subset of human skills (like empathy and leadership).

Also in Gerber's book, the next level above the Technician is the Manager. This is the person that takes care of the people and ensures that the Entrepreneur's vision comes to fruition, while keeping everyone happy. Not only is the Manager's job to develop amazing Technicians, but they are also primarily responsible for keeping new talent happy and satisfied in the workplace.

Bluntly stated, our entire industry is comprised of great Technicians (perhaps, solo practitioners), but not enough Managers. This is not the rule though, as there are some great firms out there that are successfully running and growing financial planning teams. I hope those management teams continue to more pioneer awards, but the rest of the industry is seriously lagging behind and needs help catching up.

Cries for Help and Data GatheringMy first year working in the financial planning world was a bit of a whirlwind (thank you, CFP Exam) and also a little bizarre. I graduated from a good program with an entire cohort of aspiring, and very smart, financial planners. The top students got the 'best' jobs (or so we perceived) and mostly everyone got placed somewhere.

Not so long after our journeys began though, some people were already having career doubts and I started getting phone calls asking for advice. I expected that some of my friends' jobs weren't going to work out, but I did not expect for them all to call me. I felt like I was getting career advice phone calls almost once a month.

Thus, when those phone calls came in, I listened deeply and my data gathering began. From that data, I found some common pitfalls that firms make. Using those mistakes, here are two simple ingredients for a happy, healthy new hire.

Key Ingredient #1 - Fair Expectations (and then meeting them)The first common theme I found was that expectations weren't being met. Said differently, some of the top students in my class were recruited to firms that sold them on a particular dream, then immediately failed to deliver on those dreams. Imagine graduating at the top of your class and getting recruited to work at a prestigious firm as an Associate. The only catch is, you have to work in the middle of nowhere (5 hours from a major city), your boss doesn't enjoy communicating with you or coaching you, and you will commonly be referred to as an office 'secretary.' This happened to a friend of mine who is much smarter than me. Not surprisingly, she left as soon as she could.

It seems that some firms are more concerned with "winning" the top talent, and forgetting to follow through on early promises that were made. If you're dealing with 23 year-olds, not only are they trying to learn their new roles and responsibilities, but they are often still learning how to be a professional for the first time; shoot, I still have trouble waking up before 7:00am sometimes. Even the top tier recruits still need to learn with their training wheels on at first.

As far as setting expectations go, you've got to be honest from the beginning or your best talent will leave you. Taking it further, you need to be honest with yourself on what you have to offer. So if you require your new hires to file paperwork for a full year before they can progress, you should make that crystal clear before the offer is made. And if you really haven't thought about what you want your new hire to do, maybe you're not ready to hire in the first place. It's a delicate dance, but you should be honest to yourself and anyone involved.

Key Ingredient #2 - A Manager who wants the best for youNobody wants to work for a bad manager. "Bad" is a relative term, but someone is typically "bad" when you feel like your career success is not a priority to your superior.

Imagine landing your "dream job" in your dream city, living in your dream apartment, dating a dreamy attractive person - that life sounds great! Now imagine that, in addition to those great things, your manager makes your life a living hell for 10 hours a day and doesn't seem to notice that they're slowly crushing your soul. Then on a pensive Sunday afternoon over mimosas, you suddenly realize that you're giving away 5 days out of your week to please someone who doesn't really care about you.

Most people in this situation would consider leaving that 'dream job' as soon as they could, regardless of the prestige or resume padding. Why? Because your supervisor is directly responsible for your happiness and satisfaction in the workplace, which makes up roughly 5 / 7 of your entire life (Monday - Friday). Smart and capable people will opt to work for someone who makes them feel appreciated.

The best managers I've ever had did two things for me: Firstly, they made me do stuff that I sucked at, but needed to work on to grow in my career. Secondly, they had high emotional intelligence and were comfortable discussing my attitudes towards my work; at the very least, they were able to close the office door for a few minutes to let me know I was heard. More recently, the most effective meeting times for me feel more like counseling sessions than anything. Similar to personal relationships, sometimes you need to share your feelings and feel validated in order to make those relationships stronger.

I'm sure there are some good managers out there who don't fit the mold I've just described, and that's fine, but I don't know any of them personally so I can't discuss them. All I can say is that when I know that when my boss has my back at any cost, you better believe that I will do anything for them.

The Smartest Management Move I've ExperiencedI think some people are innately good at management and keeping people happy, but I believe most people are not. That said, I think anyone can instantly improve their management skills if they focus on the ingredients listed above.

During my first year at my current firm, my manager and I had monthly meetings to discuss my progress and how I was feeling; quite simply, we called them “Monthly Development Meetings.” Imagine an in-depth Annual Review, except this meeting happens every 30 days. In this meeting, I was able to share what I was liking, disliking, and what I wanted to do next. It was on the calendar as a recurring calendar item (which means it's definitely going to happen). This was a brilliant move and a huge factor in my early development.

Extra Time for the NewbiesIn the first year, we can't forget that a young person is still "trying to figure it out," especially if they’ve relocated for the job. Any extra touches to let your employees know that you are there and that you actually care about them will pay off in spades, much quicker than you might think.

Managing employees takes an extreme amount of patience and a huge investment of your time. On top of that, not everyone even wants to help mold the next generation of financial planners. But if you can find someone who is passionate about managing people and taking care of their people, you should seek to hire those people, or work for them yourself.

We often discuss developing emotional intelligence on this blog, as it is less structured than developing technical intelligence. It’s the skill set you develop through hundreds of interactions with a variety of human temperaments and personalities. Knowing when to listen and when to speak, when to be forward and when to be subtle, when to laugh and when to be serious. There’s no crash course in emotional intelligence. Like getting fit, the goal is reached through unbroken repetition, and can thus never be fully attained. No matter how many client meetings you conduct you’ll still come across people that fall on unfamiliar parts of the spectrum.

Observation of my more experienced 35-70+ year old counterparts has been my primary source material for developing this sort of intelligence. The best golden nuggets I’ve gleaned from my most senior coworker are these: 1) Always be curious, 2) Nobody was born boring, and 3) You can’t understand someone without understanding his motivations. These things resonated with me, and I don’t see a future where their meaning isn’t relevant to my career and life. It doesn’t matter that for decades this coworker’s career didn’t involve him utilizing the internet, the advice still fits. In pondering that very thought, I considered the looming certainty that some of the recommendations and mantras of these older counterparts might be outdated. The more I thought about it, the more obvious it seemed. At 25, I’m right around the youngest age of people who remember what it was like to yell at your big sister to get off the phone while you were trying to friggin’ log on to AOL Instant Messenger. I grew up with the internet, so I’ve always understood technology better than most of my older coworkers.

Whenever we purchased a new technology at my previous firm I would be the beta tester, learning the system so I could be a resource when my coworkers were forced to switch from the outdated program. Learning new commercialized products and platforms is easy for me, which makes sense given the platform designer’s primary goal for a widespread audience is usually intuitive functionality. Growing up with the internet has made it hard for me to see from the perspective of someone who just doesn’t get how to learn new platforms, but a conversation with my roommates at dinner last night provided me with a healthy dose of empathy. My roommates work for two of the most notable “disrupter” companies in the Bay Area, constantly trying to push the limits of technological development, so I like to think they have some authority on the matters of automation and the imminent transformation of our workforce as we know it. One of my roommates postulated, “We’re probably the last generation that won’t grow up coding as a necessity. It will be a required high school class for our kids, because it’ll be crucial to function in the workforce.” I had always thought it would be cool that when I’m 90 people will be baffled that I once lived without the internet, that is until I realized how far behind I could be not knowing a lick of coding. If you enjoy this kind of thinking, I recommend reading Chuck Klosterman’s “But What If We’re Wrong?: Thinking about the Present as If It Were the Past,” which will challenge your perception and thought processes about the present day and our unknowable future. Computers have become ever-present in our lives (you probably have one in your pocket right now), so theorizing that the human workforce will need to know coding more intimately seems like a reasonable prediction. Klosterman’s book points out though, that we’re often incredibly wrong about predicting the future:

“Irrational trajectories happen all the time. Here’s an excerpt from a 1948 issues of Science Digest: “Landing and moving around the moon offers so many serious problems for human beings that it may take science another 200 years to lick them.” The prediction was off by only 179 years. But the reason Science Digest was so wrong was not technological; it was motivational… when the Soviets launched the Sputnik satellite in 1957, the meaning of the enterprise changed… By the summer of ’69 we were planting flags and collecting moon rocks.”

Our biases prevent us from accurately projecting the future because we see the possibilities through the lens of what we value today. Using Klosterman’s framework in regards to providing financial advice, it’s not whether coding will be essential to function in the workforce, but how will a future with different values affect the “old” way of doing things. We may assume that technology will replace the traditional model of providing financial advice, but it’s likely emotional intelligence will be an even more highly desired skill in such a high-tech world. When 3D printing and coding begin to show up as elementary school classes, the skills children develop in English and at recess will become more scarce, and consequently more valuable. After all, a person’s repertoire of skills is limited by the things they have time to experience. When dealing with money, the gatekeeper to so many of our life goals, emotional intelligence and communication skills will be even more crucial.

Although I believe emotional intelligence will always be valued in providing financial advice, we must recognize the likelihood of a period where no one has authority on the best way to provide said advice, and we must always critically analyze anyone who claims such authority. Much of a financial advisor’s career involves providing answers, which requires a certain level of confidence in the way you operate. Regardless of how sound your advice is, if you don’t deliver it with conviction then clients may begin to second guess your judgement. As such, it's important that we consider the advice and critiques our mentors provide through the lens of someone who's been successful advising to a particular generation, and that the values of future generations are subject to change. In other words, just because advisors have been successful with certain methods doesn't mean those methods will bring continued success in dealing with delivering financial advice in a world that’s sprinting in terms of technological development. As we improve upon our emotional intelligence, we may need to resist certain techniques our mentors implore us to use. This post is a call to attention, we need to consider that many people who have had success with their methods will be hesitant to change. Although Mark Manson was not writing in this context, an excerpt from his book “The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life” can be applied to this situation:

“Our mind’s biggest priority when processing experiences is to interpret them in such a way that they will cohere with all of our previous experiences, feelings, and beliefs.”

All you have to do is compare our collective technological strides year over year since the turn of the century and there should be little doubt we’re heading into the future with our foot on the accelerator. Given this exponential growth, we need to take particular care during the inevitable development of the delivery of financial advice. You may have been hoping for specific examples to glean from this post, but I don’t have them. It’s not exactly the smartest career move to publicize the specific ways you disagree with your superiors! Also, I consider myself fortunate to be a part of a firm that is driven to provide the best solutions for our clients. That drive is embedded in our work culture and there’s a conscious resistance to bending to pride or seniority. You should be critically reevaluating your company if superiors respond to your inquiries with “because we’ve always done it that way.”

I welcome you to comment if you have a specific examples where you disagreed with your superiors on these types of matters (perhaps anonymously would be best). Since we’re all subject to present-moment biases, sharing your experience could help other readers to realize their own environments aren’t ideal for adapting to the times.

Science fiction is often described, and even defined, as extrapolative. The science fiction writer is supposed to take a trend or phenomenon of the here-and-now, purify and intensify it for dramatic effect, and extend it into the future. "If this goes on, this is what will happen." A prediction is made.

Fortunately, though extrapolation is an element in science fiction, it isn't the name of the game by any means. It is far too rationalist and simplistic to satisfy the imaginative mind, whether the writer's or the reader's. Variables are the spice of life.

-Ursula K. Le Guin

Though extrapolation is an element in Financial Planning, it isn’t the name of the game by any means. It is far too rationalist and simplistic to satisfy the imaginative mind, whether the planner’s or the client’s. Variables are the spice of life.

I joined the ranks of financial planners because of my passion for decision making. My greatest enjoyment is derived from weaving between the complexities of life while balancing living in the moment and delaying gratification. This is paired with a tremendous amount of desire to understand the incentives and hopes that drive each of us to do the things we do. We see that this is true in finance and health, two things that affect everyone. These elements meet in a quote by Atul Gawande from his book Being Mortal:

“In the end, people don't view their life as merely the average of all its moments—which, after all, is mostly nothing much plus some sleep. For human beings, life is meaningful because it is a story.”

“A story” is not an extrapolation, a plan, or a Monte Carlo. These are simply tools used to identify how certain emotions and experiences are to be manufactured. There is no objective “successful plan” or widely agreed upon default assumption for how people desire to live their lives; “variables are the spice of life.”

Money is merely a single variable that can be emphasized or deemphasized. Our goal should be to work towards an understanding of all variables and inputs – this is how we can help others make the most quality decisions.

I am letting this post serve as a reminder to myself – to practice humility in my relationships and to understand that quality decisions do not come from spreadsheets, financial models, or a CRM. Quality decisions comes from intimate, empathetic relationships.

Getting Introduced to the EA Exams

I'm no stranger to hard exams. I remember preparing for the CFP® exam and swearing that it was the last, formal exam I'd ever pursue. Yet, here I am knee-deep into earning the IRS Enrolled Agent (EA) designation. I'm starting to think I've been lying to my friends all these years when I tell them, "I'm not a school person."

For those who may not know what the EA designation is, the EA is a designation awarded to those who are able to show fundamental competency around common tax topics. Specifically, it's broken down into 3 core segments (and exams) - #1: Individuals, #2: Businesses, and #3: Practice and Procedures.

Last year, I decided I would pursue the designation in an attempt to gain a deeper understanding of the tax code, hoping that I'd be able to apply that knowledge directly for our financial planning clients.

So far, the process has been everything I wanted. A few months ago, I passed Exam #1: Individuals. It was hard, but fairly manageable for the average test-taker. Fast forwarding to earlier this week, I passed Exam #2: Businesses. Without a doubt, the second EA exam is significantly more difficult the first. For that reason, it's worth sharing some of my personal experience and guidance for those who are brave enough to take the plunge and sign up for the challenge.

On the surface level alone, the Businesses exam is much more robust than the Individuals exam. The study material alone is around twice the size of the first exam’s materials; my study booklet doubled from around 200 pages of material to around 400 pages. To add to that, at this point in my career, I have completed a grand total of zero Business tax returns. This is an important point to make, as most financial planners have dealt with most of the topics regarding Individual taxation. Personally, I've prepared plenty of basic Individual tax returns for myself, family members, and others when I volunteer (through Orgs like VITA and Tax-Aid). Basically, the Businesses exam was completely foreign territory and studying new material felt like walking into the abyss.

Google Searching for EA Exam Tips Online

I'd like to think I'm an above-average Googler when I need information, but finding study tips for the EA felt impossible! When you're dealing with exams as robust as the EA, anything that can help calm your nerves is worth its weight in gold. So hopefully I can help ease some tension and share some of my takeaways with you.

In this post, I'll share some of my thoughts and takeaways on the experience, which might be helpful for anyone going through (or thinking about going through) the IRS Enrolled Agent process. While there are 3 exams in total, I believe Exam #2 causes the most anxiety out of the three, so it's worth diving in and de-constructing the process of that exam in particular.

Whether you're doing initial research into the designation or you're a few days away from taking the actual exam, somewhere along the way, you'll probably find yourself asking or wondering about questions like this:

Who should pursue the EA designation?

How hard is the EA exam #2?

What EA exam #2 Pass Rates?

What is the most efficient way to study?

What study materials should I use?

How many hours does it take to study for EA exam #2?

What are some other great tips to know before for the exam?

Who Should Pursue the Enrolled Agent Designation?

As a comprehensive financial planner, client meeting topics are far and wide. Sometimes we spend an hour discussing cash flow and investments, while other meetings are spent as counselors and coaches to help people achieve their goals. Invariably, in all of those meetings, there always seems to be a few, interesting tax questions asked by our clients, whether directly or indirectly. Tax just seems to touch everything!

Since we don't hold ourselves as 'tax professionals,' it's always (a little too) easy for us to say 'It's probably a good idea to check with your accountant on that one."

I know I'm not supposed to know everything, but I had finally hit the point where I was tired of not knowing certain answers to our clients' tax questions. That is frankly why I decided to pursue the EA designation.

It's important to note that although the exams do not teach you to be an all-knowing tax professional, I can honestly say that I feel significantly more confident in my tax knowledge than before my EA studies. I understand the fundamentals of taxation and all of the major components to look out for, but I'm probably a few years away from reaching 'expert' level.

How Hard is the EA Exam #2?

For me, I'd rank the exam as 'really hard.' But it's important to understand that when you say something is 'hard' or 'not hard,' it is purely relative to whatever you're comparing it to; this is otherwise known as benchmarking.

Firstly, it was hard for me; I began the process with elementary school knowledge on many of the tested subjects. Conversely, the EA material might come easier to some folks who have already been exposed to the subjects in the past. Next, I'm comparing this exam to other exams I've taken. Since I have the most experience with the CFP® exam process, that's what I use as my benchmark for basically everything now.

If the CFP® exam was a 9 on the difficulty scale, then the EA Exam #2 is a 7 or an 8, depending on your prior experience. The questions aren’t as difficult as the CFP's are (as they seemingly find pleasure in tricking you), but the material does go much deeper into taxation. While the CFP® exam is a mile wide and an inch deep, the EA exam is probably a little less than ¾ of a mile wide and around 1.5 inches deep. It's also important to note that the actual EA exam takes around 2 hours or more to complete, while the CFP takes most people around 5 hours to complete.

So, while it's less material than the CFP, it is roughly twice the amount of material as exam #1. When people refer to the EA exam being difficult, they are usually talking about exam #2 in particular.

What are EA Exam #2 Pass Rates?

For reference, exam #1's pass rates are above 75%, while exam #2's pass rates are typically around 60%. Those numbers alone should tell you about the stark difference between #1 and #2.

About a week before the exam, I found myself searching to know what my odds were for passing (and failing). Looking back, learning this information did not help my anxiety or my attitudes whatsoever. Knowing the stats beforehand is great, but if you want to increase your odds of passing the exam, don't worry about the stats and focus on efficient preparation.

What's the most Efficient Way to Study?

I learned a hard lesson during my CFP studies after I failed the exam on my first try. Essentially, I was studying incorrectly.

Firstly, if the exam is a multiple-choice test held on a computer, then you should prepare by taking multiple-choice quizzes on a computer regularly. Similar to training for a race, if you are signed up to run the 100M dash, you should prepare by running set sprints regularly, not long distance jogs.

Next, you'll also want to focus on the topics that are most likely to be tested over. Said differently, there are a ton of topics that you can study, but the reality is that not all of the topics will be in equilibrium. You need to focus on the particular subjects that will be covered, and breeze past the topics that have low probability of showing up on the exam. So how will you know what to focus on? Obviously there is no way to know which exact questions will be on the exam, but I did discover a way to direct my extra efforts.

Here's how you can learn what to focus on:

Firstly, you should have access to a large question bank that you're using for practice quizzes. As you are creating a quiz, you should be able to see how many questions are available for each particular topic. For example, in my Gleim account, I can go to 'Create a Practice Exam' (which I used just about every day). From there, I can choose which section(s) I want to be quizzed over at that time, along with the number of questions I want to be on this quiz. As an example, if I wanted to be quizzed over 'Corporate Formation: Recognize Gain and Loss,' I can see that there are 74 available practice questions. Compared to a random section, like 'Other Deductions: Business Use of Home,' you'll see that there are only 2 questions for that entire section.

So if there are 74 practice questions available for one section and only 2 questions available for another, that is Gleim's way of telling me that I should really know the in's and out's of Gains and Losses in Corporations. Now that I'm on the other side of the exam, there were indeed several questions over this subject (and none over the other subject with only 2 practice questions).

This is obviously not an exact science, but if you're like me and you like to focus on the 20% that will yield you 80% of your results (ie. the 80/20 principle), then this could be a tactic for you to use.

What Study Materials should I use?

This is probably the most common question for anyone wanting to get started preparing for a large exam.

Personally, I used Gleim to prepare for my exams. I can't speak to any other preparation materials, as I have no experience with any of them. That said, Gleim was recommended to me by a trusted colleague and it had everything I needed.

I will add that Gleim is a business and they will always try to up-sell you into 'premium' services. The package I purchased had access to some of the extra bells and whistles and, being frank, I didn't really use any of them.

All you need is access to as many practice questions as possible, along with a reference book that you can use whenever you don't fully understand the answers to your practice questions.

How Many Hours does it take to study for the EA Exam #2?

This another question that caused me a little bit of anxiety before the exam. Everything I had read online told me I needed to spend 80 hours or more studying for exam #2. I didn't tally up my study hours for this exam, but 80 hours sounded like a lot and I don't think I reached that amount.

The key to passing any large exams is to put in the hours and practice, which requires practicing each and every day for several weeks. That said, I think that studying efficiently goes much further than simply putting in 'more hours' than the next person. As long as you go into each and every study session with good intentions and focus on leaving the session with 2-3 nuggets of wisdom after each one, you'll be well on your way to passing exam #2.

In total, I did practice quizzes every morning before work, along with quizzes and additional reading and review every weekend. The final two weeks leading to the exam, I pulled 'two-a-days' and studied in the evenings as well. I did this over 6-7 weeks.

What are some other great tips to know before the exam?

During your final week of review, you'll want to make sure you know the 'easy stuff' like the back of your hand. The single most important (last minute) piece of advice is to know that the 'easy' questions count just as much as the 'hard' questions.

If you're having a hard time with a particular concept, it's okay to move on and focus on other 'easier' material if you believe it will be tested. In my personal opinion, it's better to have 100% fluency over half of the exam, as opposed to 50% fluency over everything. There is nothing better than being in the exam and flying through 5 questions in a row because you could answer them in your sleep.

Night-time Routine and Relaxation Saved my Score

During the days leading up to my exam, my stress levels were at all-time highs. Frustratingly, high stress in the evening took their toll on my sleeping patterns and I wasn't getting as many ZZZ's as I needed. We all know that a good night's sleep can work wonders on the body and mind, but test anxiety will do whatever it can to chop that number in half and ruin your momentum.

The night before the EA Exam #2, I did one quick final review (30-40 min of reading personal notes only - no quizzes) of the last topics I wanted to see, then I closed everything and took the rest of the evening to enjoy myself. At that point, the hard work had already been done and it was time to focus on winding down for the evening.

I closed my laptop and made a trip to the gym to make sure I sweat out my stress and lifted weights until it burned. After the workout, I ate a clean (and nutritious) meal while I watched my favorite TV show over a beer (yes, I had a beer directly after my workout - it was delicious). I went on to get the best sleep I'd had in days and rode that momentum all the way until the Prometric employee handed me a piece of white paper that said, "Congratulations! You passed the Special Enrollment Examination Part 2 - Businesses."

It's no secret that this exam is hard and there will be a million ways to lower your confidence right before the exam. If you've put in the hard word for weeks and studied with great intent, you'll be more surprised (and impressed) with everything you know on test day.

I am currently reading The Man Who Knew: The Life and Times of Alan Greenspan by Sebastian Mallaby. This excerpt stood out to me:

Greenspan had spent a year and a half on a report that was destined for some dusty shelf; he had been wise not to invest more energy in it. And yet this non-outcome proved more significant than it appeared, for it anticipated the story of financial reform during Greenspan's Fed tenure. Finance did change in the 1970s, but it was shaped not by the deliberate planning of an expert commission but by market pressures and crises. The fact that Greenspan and his fellow commissioners proposed to phase out Regulation Q did not matter in the end; Regulation Q was neutered anyways as savings flooded in to the new money-market funds, as unregulated dollar bonds multiplied in London, and as the Fed dealt with the panic following Penn Central by scrapping the Regulation Q cap on the interest that banks could pay to attract very large deposits. The pattern was the same in later years. Finance changed dramatically in the 1990s and early 2000s, but the change was not dictated by the deliberations of experts; earnest working committees pondered the meaning of the new swaps market or the rise of shadow banks, but Greenspan declined to throw his weight behind their ideas, and their findings failed to alter policy.

In this tentative approach to his regulatory responsibilities as Fed chairman, Greenspan was perhaps exhibiting a fatalism he had learned under Nixon. The evolution of finance could have huge consequences, to be sure, but efforts to shape it were liable to founder. Technological changes, the exigencies of crises, and money's mulish tendency to find its was around the rules - these forces decided things.

It is worth the time reading about Greenspan and the financial changes during the second half of the 20th century. As the saying goes, "History doesn't repeat itself but it often rhymes."

Why do you go away? So that you can come back. So that you can see the place you came from with new eyes and extra colors. And the people there see you differently, too. Coming back to where you started is not the same as never leaving.

— Terry Pratchett

Two of us - Joe and Luke - decided to take a trip to Norway during the last week of October. It was a wonderful experience that gave us a chance to spend some serious time reflecting on our personal and professional goals, as well as continue to cultivate our strong friendship.

We chose Norway for two reasons:

From an economic standpoint, Norway is one of the most interesting countries in the developed world.

Tiny Norway, with a population of 5 million, is home to the world’s largest sovereign wealth fund which has a total AUM of just under $900B USD. Funded by Norway’s large amount of oil revenue, the fund invests in 9,000 companies and has investments in 75 countries, according to their website.

What is also interesting is the huge role Norway’s “Council of Ethics” plays in how the fund is invested. Excluded on their long “black list” are tobacco companies, producers of nuclear arms, creators of severe environmental damages, and human rights violators to name a few. This enormous amount of wealth also allows Norway to be extremely progressive in the department of providing subsidies to its citizens for the use of clean energy such as electric vehicles. For a while the bestselling car in Norway was California’s own Tesla Model S.

Norway is also one of the most beautiful countries on the planet.

Byrkjelo

These two reasons were more than enough to spend some quality time stepping away from the hustle and bustle of day-to-day life to take a deep (cold) breath.

Oslo:

Oslo is Norway’s capitol and largest city. We spent two days exploring this city, where we had a few drinks and made some friends.

Grünerløkka Neighborhood in Oslo

One aspect of the trip that went well in particular was the balance between planning and spontaneity. We had a general plan as to where we were headed: from Oslo to Bergen then a bit further north, concluding the trip back at Oslo. There were a few fjords we wanted to see; however, we also left a few days unplanned. This allowed us to take advantage of recommendations by our Airbnb hosts and explore things that caught our attention as we were going along. This balance between uncertainty and planning is a tricky one. It is natural to want to eliminate uncertainty. Traveling to a foreign country where we didn’t speak the native language and had limited cell phone use certainly involved risk. Despite this, several of the most interesting sites we saw were possible because we did not plan everything out.

While in Oslo we were also fortunate to visit the Viking Ship Museum. It was very humbling to see these colossal boats that traveled incredible distances across the bitter cold Atlantic.

Naturally, probably trigged by the enormous amount of passion the Vikings had, a fair amount of time on the trip was spent discussing career and personal development. It is helpful to reflect on these ideas in a different setting than one is accustomed to because it allows one to think from a different perspective. As we have written on this blog before, bringing about change involves three things: changing one’s environment, changing who one spends time with, and changing one’s routine. Traveling results in all three. In particular, changing one’s environment allows one to have a more objective view and can bring about thoughts that might not occur otherwise. It was helpful to think about career and personal development from a bit of a different viewpoint

Bergen:

Bergen is Norway’s second largest city and is surrounded by mountains and the country's longest and deepest fjord, Sognefjord.

Overlooking Bergen

We were in the city of Bergen for three days. Our first day started with a wonderful hike to the top of Fløyen, one of the city’s mountains that overlooks Bergan city centre.

Throughout this hike we discussed a lot pertaining to the concept of uncertainty.

Just like with traveling, uncertainty involves risk but also can offer potential rewards. It is a natural tendency to want to eliminate risk. In the past risk represented life-and-death danger. While this is no longer the case – most of us don’t have to worry about where our next meal is coming from – the fear of uncertainty is still there. As a young person, however, certain risks are worth taking for the potential reward. The entrepreneur and investor Gary Vaynerchuk notes the following about this:

If you are 22 years old, regardless if you’re graduating from college or not, there are two things you should keep in mind. The first is to acknowledge that you are entering some of the greatest years of your life. The second is that this is the moment when you don’t go practical — don’t take the “safe” route. This is NOT the time to get the job Mom always wanted you to get. This is NOT the time to try to maximize as much money as you can make so you can save up to buy a sick ride. This IS the time, however, to realize that you have a five-year window (three for some, eight for others) for you to attack the life that you want to win.

One of the fundamental principles of the world is that risk and reward go hand-in-hand. More importantly, there is no such thing as a risk-free reward, even if the only risk is the opportunity cost of something else. The key is to take calculated risks when the potential reward makes it worth doing so.

We also took a day trip to an old secluded village by the name of Undredal. Like many cities in this part of Norway, it was virtually inaccessible, apart from boat, prior to the completion of a series of tunnels punched through the mountain ranges. Some of these tunnels are over 10 miles long.

Undredal

Undredal has a population of 100 people and 500 goats. They make cheese and is home to the smallest Stave church in Northern Europe. A Stave church is a medieval wooden Christian church; this one was built in the year 1147. Old here means something completely different than it does in the United States.

Undredal Stave Church

Fjords:

Geirangerfjord

Several days of the trip were spent exploring various fjords. A fjord is created when a glacier carves a sharp narrow valley which is then filled with water. The steep sides of the land around the fjord and the stillness of the water were particularly noteworthy. The magnitude of the fjords are tough to put into words, but they are remarkable.

Alexander in India encountered some gymnosophists (literally “naked wise men”) yogis, sitting in meditation in the sun on the banks of the Indus. Alexander’s party was trying to get through the busy street, but the yogis had their spot and they wouldn’t move. One of Alexander’s zealous young lieutenants took it upon himself to chase the holy men out of the king’s path. When one of the wise men resisted, the officer started verbally abusing him. Just then, Alexander came up. The lieutenant pointed to Alexander and said to the yogi, “This man has conquered the world! What have you accomplished?” The yogi looked up calmly and replied, “I have conquered the need to conquer the world.”

-The Warrior Ethos, Steven Pressfield

Eidsdal

This is one of our favorite stories. We discussed a great deal on this trip the importance of self-awareness before focusing on any external goals. This anecdote is especially powerful because the exchange is occurring between two individuals that from the outside perspective could not seem more different, further separated by all imaginable measures of success, brilliance, and power: Alexander the Great vs. some naked Indian yogi.

This trip provided a tremendous opportunity for self-reflection and acknowledgement of weaknesses in order to identify areas for improvement. We spent a great deal of time engaged in conversation but also a good amount was spent self-reflecting. Joe continued his streak meditating (he has meditated for 283 days consecutively), Luke had the opportunity to read a write a great deal while completely removed from his routines and comfort zone. We continued our quest towards identifying our own version of “conquering the world”.

Geirangerfjord

We discussed the following books:

Slaughterhouse Five – Kurt Vonnegut

Jesse Livermore - Boy Plunger: The Man Who Sold America Short in 1929 – Tom Rubython

For several reasons I decided to make some changes and get back to the fundamentals in the month of July: exercising consistently, eating a healthy diet, spending more time outside and less time on social media, consistent meditation, writing in my journal on a daily basis, reading books every day, zero frivolous spending, and not drinking any alcohol. During the final few days of June I mapped out a specific plan with specific goals on each of these objectives. The next step was to figure out how to make these changes happen.

There are three main ways to change oneself:

Change one’s daily habits or routines.

Change one’s environment.

Change the people one surrounds him or herself with.

Outside of these three change is improbable, if not impossible. In fact, without some combination of all three, it is not likely to happen either. Real and permanent change requires one take deliberate steps in all phases. For example, if I wanted to lose ten pounds, but I kept visiting the same bar (number 2) with the same group of unhealthy friends (number 3), the weight loss would never happen. It might in the short term, and if I have great self-control I might even be able to keep it up for a full year, but ultimately I would revert back to my old self. Point being, significant and lasting change requires not one or two adjustments, but mindful adjustments in three specific aspects of one’s life: one’s daily habits or routines, one’s environment, and the people one spends time with. As Darren Hardy notes in The Compound Effect, “Small, Smart Choices + Consistency + Time = Radical Difference.”

With the first six months of 2016 almost over, here are a few things I’ve learned and been thinking about so far this year:

A wealth of information creates a poverty of attention.

More information does not necessarily lead to better decisions. Take a break from Twitter, Facebook, newspapers, CNBC, texting, etc. Arthur Conan Doyle noted the following:

I consider that a man's brain originally is like a little empty attic, and you have to stock it with such furniture as you choose. A fool takes in all the lumber of every sort that he comes across, so that the knowledge which might be useful to him gets crowded out, or at best is jumbled up with a lot of other things, so that he has a difficulty in laying his hands upon it. Now the skillful workman is very careful indeed as to what he takes into his brain-attic. He will have nothing but the tools which may help him in doing his work, but of these he has a large assortment, and all in the most perfect order. It is a mistake to think that that little room has elastic walls and can distend to any extent. Depend upon it there comes a time when for every addition of knowledge you forget something that you knew before. It is of the highest importance, therefore, not to have useless facts elbowing out the useful ones.

Meditation is not about controlling or eliminating thoughts; it is about learning to be at ease with them.

Training the mind takes practice and patience. This video provides a great summary.

It is a common misconception that success creates happiness. However, it is actually the reverse: happiness creates success.

Our environment and the people we surround ourselves with have a larger influence on us than we think.

Via The Start-up of You by Reid Hoffman:

Relationships matter because the people you spend time with shape who you are and who you become. Behavior and beliefs are contagious: you easily “catch” the emotional state of your friends, imitate their actions, and absorb their values as your own. If your friends are the types of people who get stuff done, chances are you’ll be that way, too. The fastest way to change yourself is to hang out with people who are already the way you want to be.

The first half of 2016 has gone by quickly to say the least. The four points above are some of the bigger lessons learned. As always, reflection is one of the keys to lifelong learning, and one would be mistaken not to take a moment to look back as we enter the second half of the year.

*Communication on this website does not constitute a recommendation and is for educational purposes only. None of the information contained in this website constitutes a recommendation for any specific person. The authors are not advising you personally concerning an investment strategy or other matter. All opinions expressed on this blog are solely those of the authors and are in no way affiliated with any other organization or institution.